Upstart (UPST) is one of the best stocks on Friday, up more than 40% at last check, after the artificial intelligence (AI) lending marketplace beat top- and bottom-line expectations for its third quarter and provided a stronger-than-anticipated outlook for its fourth quarter.
In the three months ended September 30, Upstart's revenue increased 20.5% year over year to $162.1 million, boosted by a 30% pop in transaction volume to $1.6 billion. Meanwhile, its net loss widened to 6 cents per share from 5 cents per share in the year-ago period.
"With 43% sequential growth in lending volume and a return to positive adjusted EBITDA [earnings before interest, taxes, depreciation and amortization], we continue to strengthen Upstart's position as the fintech leader in artificial intelligence," said Upstart CEO Dave Girouard in a statement. "Even without a significant boost from the macroeconomy, we're back in growth model."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results easily topped analysts' expectations. Wall Street was anticipating revenue of $150.2 million and a net loss of 15 cents per share, according to Yahoo Finance.
For the fourth quarter, Upstart expects to achieve revenue of approximately $180 million, well ahead of the $162.3 million in revenue analysts are anticipating.
"We're hopeful that we'll see macroeconomic wins in the quarters to come, but we're not waiting around for them," Girouard said. "Upstart's mission is simply to improve access to credit, and our strategies to accomplish this goal is to provide the best rates and best process to everybody."
Is Upstart stock a buy, sell or hold?
With Friday's post-earnings surge, Upstart is now up more than 95% for the year to date, but Wall Street remains on the sidelines when it comes to the financial stock.
According to S&P Global Market Intelligence, the average analyst target price for UPST stock is $40.19, representing a substantial discount to the current share price of nearly $80. Meanwhile, the consensus recommendation is Hold.
Financial services firm Needham is one of those with a Hold rating on the mid-cap stock.
"While we are constructive on UPST's growth trajectory over the medium term, we believe that it is still relatively early on in the days of a growth recovery," says Needham analyst Kyle Peterson. "While we expect there to be opportunities for growth investors to add UPST to their portfolios in the event of a pullback in the shares and/or increased conviction that estimates will continue to climb higher, we view the risk-reward as neutral at the current time."
Related Content
-
Is Your Social Security Earnings Record Wrong? Here's How to Fix ItYour Social Security benefits are based on your Social Security earnings record. It's important to review your records to avoid having your benefits reduced.
-
Stock Market Today: Markets Discount Another U.S. DowngradeAfter Friday's closing bell, Moody's followed Standard & Poor's and Fitch and cut its rating on U.S. government debt.
-
Stock Market Today: Markets Discount Another U.S. Downgrade
After Friday's closing bell, Moody's followed Standard & Poor's and Fitch and cut its rating on U.S. government debt.
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
What's Next for Stocks After a Chaotic SpringA chaotic tariff policy buffets investors looking for clarity on the economy and inflation.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term CareMany people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Where to Invest in an Uncertain MarketIn an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
My First $1 Million: Events Industry CEO, 65, Northern New JerseyEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
